Has the New Tax Law Affected Donor Habits?
Many can no longer write off individual gifts to nonprofits
Ever since Congress passed the Tax Cuts and Jobs Act (TCJA) in December 2017, the fundraising community has been concerned that its changes would stunt donations. The first filing season covered by the law closed on Monday, and donors have started to notice the changes.
“I think there is a lot going on in how donors are reacting,” said Patrick Rooney, executive associate dean for academic programs at the Indiana University Lilly Family School of Philanthropy. The school studies donor habits and has been particularly interested in how tax changes affect giving.
The part of TCJA that most affects givers is that the standard deduction was nearly doubled. This moves a significant number of people from itemizing their taxes to taking the standard deduction, meaning they can’t write off individual gifts to nonprofits.
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